Study Says Hybrids Are a Lousy Value

I hate information spin like that.

HEADLINE: Study Says Hybrids Are a Lousy Value

Well unfortunately that's where a lot of people are going to stop reading...and thinking.

Then they exclude the best selling, most efficient hybrid in the world. The Prius?

They include some admittedly lousy hybrids that aren't even being produced anymore.

Plus how can they figure potential operational saving based on gas prices, nobody knows what Gas Prices might be in 3 years...but best guess says HIGHER than today.

Including some of the early attempts at marketing a hybrid, which in some of those cases were pretty poor offerings and excluding Prius and Insight seems slanted and unfair.

I even get tired of the whole useage of the term "Hybrid Premium". Quite honestly, you seldom if ever hear someone talking about a "Sports Car Premium" if someone pays for a sports car...or an SUV premium if someone buys a big SUV instead of a potentially cheaper Mini-Van.

Prius is the mass marketed benchmark and Iconic definition of a hybrid. A big picture "study" proclaiming the value of hybrids cannot simply exclude it's existence. You can't say we are only comparing apples to apples but then run a headline saying ALL HYBRID APPLES ARE A LOUSY VALUE....only to admit later that two of the best hybrids available weren't even included in the study.

 

Yet again, why is a hybrid expected to "pay you back" when a BMW or Mercedes isn't? We enjoy the cars for many reasons, especially not using a lot of gas! Others enjoy their cars for performance or luxury! We all pay the premium for that enjoyment!

 

When the runaway best seller is excluded, and high priced barely selling pigs such as the Yukon, Tahoe, and Accord Hybrid are weighted just as heavily as the best value, best selling other hybrids, I expect to see seriously warped conclusions such as this.

 

Commenting on a news report about another group's report is a waste of time. I tried to find the original report in CarGurus.com and haven't had any luck. Without the original report, we can't really be sure what the author(s) claim.

When I visited CarGurus.com, I got the impression they are in the car sellin' business and I suspect they have little or no association with hybrids. The other curious thing is when I asked for a listing of cars with better than 45 MPG, they only showed one car, the 2010 Prius. So I suspect they are going only by the EPA rating, not the actual user mileage or they would have include the Insight and probably the NHW20 model Prius ... opps the NHW20 would be a 'used car.'

Bob Wilson

 

To their credit the article (haven't seen the original report) does reference the report's point that a large issue in the financial value is the fact that hybrid buyers are forced to pay a premium for options they don't want.

To do a true hybrid-only comparison you can't compare with the base, you have to compare with a similarly equipped model.

 

A NEWER study reports that "Studies" are a MAJOR pain in da nice person!!!

 

Well, maybe it's just because I'm cheap, but I sure think hybrids pay for themselves. At least the hybrids I'd care to buy.

When I read this thread, I went and looked up the data on the Ford Fusion. Near as I can tell, the hybrid version costs about $7K more than the equivalent non-hybrid version (4 cylinder automatic transmission). That's MSRP off the Ford website, $28K versus $21K.

So, oh my gosh, the hybrid costs one-third more than the non-hybrid car. In terms of purchase price.

But looking at fueleconomy.gov, at $2.68/gallon, the hybrid saves about $600/year in fuel costs.

So, ... if the car lasts 12 years, the fuel savings pay for the additional up-front cost. Plus it provides protection against gas price spikes. And if it lasts longer, it pays off better.

I'd say Ford has priced that as being just about a square deal, in terms of combine purchase and operating cost. The lifetime cost of the two cars is about the same.

Now, what you'll see is analysis that says, does the hybrid pay for itself in (say) five years. But those analyses tend to be kind of ignorant. They'll compare five years of gas savings to the initial purchase price differential. But the gas savings don't stop after five years. Presumably, five years out, with equivalent expected service life left, the hybrid ought to be worth more. How much more? Well, at least the net-present-value of the future gas savings.

So I just don't get it. Looking at what seems to be kind of a worst-case scenario -- the hybrid costs one-third more than the non-hybrid vehicle -- a quick back-of-the-envelope with publicly available data shows that the lifetime cost of the two vehicles is roughly the same -- at current gas prices. If we ever pull out of this recession/depression, my opinion is that stiff rise in gas prices is pretty much a sure thing. In which case, in hindsight, there'd be no question that the hybrid Fusion was the better value.

EDIT: Let me do a similar rough cut of the Highlander.

The Highlander Hybrid limited costs about $6500 more than the Highlander Limited 4WD ($41,220 versus $34,670, MSRP, Toyota's website). And the Hybrid comes with the towing package and power rear door, so that's a modest exaggeration of the actual difference in cost. (Near as I can tell the remaining options on the cars are the same).

Alternatively, I could compare the "non-Limited" hybrid to the cheapest 4WD highlander, and come up with about a $6000 difference ($34,900 versus $29,200). Same ballpark.

Fueleconomy.gov shows $650/year in fuel savings.

So, same deal. Keep the car 10 years, at average US annual mileage, and the gas savings pay for the up front cost.

My conclusion is, even if I just focus on the narrow issue of the out-of-pocket costs to buy and run the vehicle, people who say (full) hybrids don't pay for themselves are just full of crap. Certainly, these two hybrids pay for themselves in fuel savings.

 

You can't judge the 'value' of a hybrid until you know how many miles you drive each year.

Owning a hybrid that sits in the garage and gets waxed on saturdays, will never pay back the 'hybrid premium', it may make the owner feel happy and have other value but not monetary.

Driving a Hybrid taxi 24/7/365 may save the 'value' of the car each year.

I drive 30,000 miles a year and save $1000 USD each year over a Toyota Matrix.

 

If you compare MSRP maybe, but I paid about the same for my Prius as I would have paid for a comparably equipped Camry, and I get 50 mpg city opposed to 24 mpg city and have the same comfort and quality as a Camry...
Instead of Apples to Apples, how about Dollars to Dollars in fuel costs over the life of the vehicle...

 

I think the point of the study was to examine vehicles that had both a hybrid and non-hybrid option. Thus, disqualifying Prius and Insight. It wasn't an attempt to skew the study in anyway.

The real villain is the reporting, it should be made clear that it only refers to vehicles with both options. In my opinion, the mpg savings of a hybrid camry over a non-hybrid camry is so minimal that i have to agree with the gurus.

 

Simple answer. They were not included because to include would skew the results they were seeking.

Purchasing the G3 Prius was one of my better value decisions. It has been a terrific automobile: quiet, comfortable; trouble free; and wonderful economy.

Yesterday while at the dealer getting a routine oil change, I asked the service manager if after a year the G3 had revealed any problems? Absolutely none was his answer. He said the dealer has only replaced 2 HV batteries ... total ... since the dealership was established several years ago. Both were beyond warranty, but Toyota had replaced both at no charge.

"Lousy value" ..... lousy study!

 

One of the pervading problems with these types of reports is the exclusion of emissions output reporting. Too many people are only concerned with money saved and payback period and never even consider emissions reduction. In the case of the Camry, the additional 8mpg combined average and reduction in emissions output would make the extra cost worth it to the purchaser and for those of us who breath...

 

Studies: My favorite comedy/study was posted here by Art Spinella, who "proved" the Hummer is more eco-conscious than that toxit/horrible Prius, base on dust to dust conclusions. Suddenly, POOF - Hummer is skuttled, GM can't even GIVE the entire business line away, much less sell it to the Chinese auto industry ... and those whacky customers just keep buying the Prius. Stupid customers.
ound:


.

 

True F8L, but many, many people will tell you they "do not care" about emissions. Right about that time I start insulting people.

CHogan, all these cost analyses make assumptions how long the car will be kept, and how many miles/year the car used. The results vary by assumptions. Like you, I just start with a 200k mile car life to avoid the guessing game of depreciation and because that is how I own cars, but opportunity cost in the form of interest will vary depending how long the car is owned and interest rates used, assuming maintenance and repairs are similar costs (hah!).

Personally, I think a table would be an attempt at a fair analysis. Even better would be a weighted graph. It is pretty straightforward to figure out costs with a financial calculator, but it seems most people have come to rely on auto mags to tell them the "answer."

 

Agreed. That is when I feel like socking people in the mouth for being so uncaring and anti-social. lol

*sigh*

 

Actually a series of curves.

As I was calmly driving into work this morning, something easily accomplished in an older Prius that is not a performance gasser, I was reflecting that there are two independent variables after the purchase price that have a distinct impact on total vehicle ownership costs and several minor ones:

• miles drive per year - folks vary and someone who is only driving 10,000 miles will have a significantly different cost compared to someone driving 20,000 miles or more. This is a major cost driver.
• fuel cost - independent because we've seen from $3-4/gal to as low as $2.40/gal in the past two weeks. It has a secondary effect on vehicle resale value making it nonlinear.
• insurance costs - a minor but significant, annual cost.
• maintenance - hybrid ICE gets fewer run hours (aka., Hobbs metered) per year and at lower stress.
• brake jobs - in some cases, the brake shoes, rotors and drums appear to last the life of the car.

So if we do a total cost of ownership study, we should be looking at sets of curves. And this is the type of stuff I think about driving into work in my low-stress, easy going, non-performance, Prius . . . the older one. Hummm, I was also monitoring the new ScanGauge XGAUGE values for minimum and maximum traction battery module voltages. Needless to say, this might not be the kind of fun most folks enjoy. For them, there is a simpler answer, 42.

In all seriousness, we need to get a copy of the original report so we can cite 'chapter and verse.' It is unfair to use a 3d party's report and try to make a cogent criticism. In some respects this is 'shades of CNW Marketing' that was preceded by press releases before the report became publicly available. So the skeptic unfairly had the stage before the real errors were found. We played this same game four years ago. But I am gratified that so many Prius owners have 'sharpened pencils' ready!

One thing a decade of hybrid skeptics have done is sharpened our collective wit about such analysis to a very, very fine point. It doesn't mean we won't see more skeptics pop up but if they don't have their 'ducks in a row,' they will get hammered.

Bob Wilson

 

Bob, how about a weighted nomogram, with these variables:

Hybrid Premium
Interest rate
Vehicle longevity (in miles)
Miles/year used
Fuel cost

 

We need to include the non-linear, depreciation which also has a weak association with 'Fuel cost.' Given how my mind works, sets of three dimensional curves would be more to my tastes even though it is an "n" dimensional problem with "n" > 3. . . I'd have to park to put that in my mind. <grins>

Bob Wilson

 

I suggest ignoring depreciation entirely, and just figure life of car as the endpoint. This has the advantage of letting laypeople know where the breakeven point is. This graph would also make it evident whether the hybrid premium is *ever* recouped. E.g., if the breakeven is 500k miles, most people would say "no," whereas if breakeven is at 100k miles, most people would say "yes." -- both with reasonable degrees of accuracy.

n-dimensional graphs sound like fun, but perfect is the enemy of very good, eh ?

I'll take a crack at it after I do my chores today. Am I understanding correctly, that an expression is turned into a weighted nomogram by spacing the Y axes in proportion to each term's coefficient, and orders (term degrees) linearized by plotting log values ?